JD Group to sell off finance unit in R4.6bn deal

Published Dec 19, 2014

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JD GROUP will sell its loss-making consumer-finance business to a BNP Paribas unit for R4.6 billion in cash, allowing it to focus on furniture sales. Steinhoff International Holdings, which owns 86 percent of JD Group, had “irrevocably undertaken” to vote in favour of the deal, the Johannesburg-based company said in a statement yesterday. The price will be finalised when the sale to RCS Cards, which BNP bought in August, goes through. “This will add to the strategic repositioning and growth of its retail operations,” the company said in the statement. Customers will have “access to credible and affordable consumer finance via its relationship with RCS Cards”. JD Group’s consumer finance unit offers customers credit when purchasing at its stores. The company was trying to stem a deterioration in the division that suffered a R2.1bn loss in the year to June as its customers had taken on more debt and become poorer, it said. Now it would focus on sales of furniture, electronics and appliances. RCS Cards would provide JD Group customers access to credit for 10 years, the company said. JD Group shares gained 0.2 percent to end at R24.65 yesterday. The shares have dropped 15 percent this year, lagging behind the 6.6 percent gain in the all share index. – Bloomberg

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